Car firms ‘paddling furiously’ to maintain post-Brexit supply chains

Car-makers are “paddling furiously below the water” to maintain their supply chains, an industry leader has warned.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, told MPs that the movement of parts has been “difficult” since the end of the Brexit transition period.

Giving evidence to the Commons Business, Energy and Industrial Strategy Committee, Mr Hawes said there was a “pervading sense of relief” within the automotive sector that an agreement on trade had been negotiated between the UK and the European Union.

“We ended up, I think, with a deal that in many ways works for the sector, most obviously in the avoidance of tariffs and quotas which would have been a severe brake on the industry,” he said.

“However, it doesn’t mean zero cost. The industry is trying to manage its supply chains. We are integrated within the European, if not the global, industry, so the supply chains do stretch far and wide.

All businesses are struggling to understand what it is you now have to do

“All the industry is … I characterise it as paddling furiously below the water to keep things going.”

Mr Hawes said the administration required to move goods in and out of the UK is “significant” and a “major challenge”.

The sector would have benefited from a “longer implementation period”, he added.

“With the Withdrawal Agreement there was supposed to be up to 21 months of implementation period.

“We ended up with effectively seven days over the Christmas shutdown from the publication of the deal to when it took effect.

“So it’s understandable that all businesses are struggling to understand what it is you now have to do.”

Mr Hawes said there have been “a couple of stoppages” at factories, but these were “primarily” due to the global shortage of semiconductor chips.